Governor Bourke suggested Melbourne's little streets as access routes to service properties fronting the major east-west thoroughfares, but Surveyor Hoddle's 1837 street grid made no provision for the lanes or alleys which by the 1850s had quickly proliferated within the city's large blocks. By the mid-1850s there were 80 named lanes and 112 rights-of-way, many private, in Central Melbourne. Lanes were used for deliveries, as workshops and extensions of warehouses and factories, for night-soil collection and as tips for rubbish. Often poorly lit, they were frequently used as makeshift public toilets, the stench of urine from the back lanes being one of the ubiquitous 19th-century city smells, particularly in the theatre and entertainment precincts.
Many of Melbourne's city councillors, functional zones, businesses, builders, immigrant ships, and hotels, are immortalised in the names of its lanes. In Fergus Hume's 1886 novel The mystery of a hansom cab, Calton and Kilsip turn off Bourke into the back streets as if descending into an inferno, keeping to the middle of the alley to avoid attack from the shadowy figures surrounding them. Throughout the city's history the politics of changing street names in reaction to offensive social connotations highlighted the social and moral geography of the city. Melbourne's lanes were popularly decried as Melbourne's 'infant St Giles', filthy backdrops to the main streets, the resort of the criminal and the deviant. Lanes were occasionally renamed under pressure from local residents concerned for their property values and the respectability of their neighbourhoods. In 1868 the name of Synagogue Lane was changed to Little Queen Street because the former name 'has unfortunately acquired a notoriety'. The name was changed again in 1909, this time to Bourke Lane. Condell's Lane was renamed Vallance Alley in 1874, though the old name was restored after a complaint from a resident who claimed the change would interfere with his business, having already printed up his business cards, letter papers and bill-heads with the old address. In 1876 Romeo Lane, with its 'disorderly' and 'immoral' associations, was changed to Crossley Street, residents claiming they were having trouble letting properties to respectable tenants, despite having replaced former 'dilapidated hovels' with 'superior stabling'. Blossom Alley off Little Bourke Street was changed to Barkly Place in 1913 'as more dignified and in keeping with its developed importance'.
In the latter decades of the 20th century, while Melbourne's lanes and alleys were recognised for their heritage character and as providing an important inner network of public space, many had been subsumed by developments such as Melbourne Central, Collins Place, and the Hyatt Hotel. Back lanes, once the target of slum clearance advocates, also added to the character of inner-city neighbourhoods. In 2004 Corporation Lane off Flinders Lane was renamed AC/DC Lane to commemorate the rock band whose 1975 It's a Long Way to the Top film clip featured the band performing on the back of a truck travelling down Swanston Street.